A lot of New Yorkers are hoping to list and sell their homes this spring. Unfortunately, new tax issues may not help.
The real estate market has clearly turned. The economy may not be far behind. With mortgage lenders tightening up, taxes rising and home values appearing to be on a downward trajectory, this will be the best moment for many to sell their homes and cash out. That just doesn’t mean it will be easy.
New Property Transfer Taxes
When a property is sold, new NY transfer tax rates can take a big bite out of your proceeds. These rates are now 0.4% to 0.65% for the state, and 1.425% to 2.625% of the sales price for NYC, on top of state charges.
Corporate Buybacks & Tax Breaks
US companies have spent a new record amount of $806B buying back their own stocks with new tax breaks instead of using them to create more jobs or expand operations. Those that have expended, especially in NY have been given big multimillion dollar tax breaks. So, fewer jobs and more property taxes to be spread amongst small businesses and homeowners.
Nassau County Re-Assessments
As we are all too painfully aware of, Nassau County has reassessed properties and changed the tax system to increase property tax bills dramatically. That’s going to make homes substantially less attractive for potential buyers.
New Sewer Taxes
Environmental groups are also pushing for even higher property taxes on Long Island. They are pursuing a $70M legislative measure in Suffolk County which will mean a new $110 addition to the average water bill, or a $75 addition to property tax bills. That could actually lead to an increase of 25% to 33% in these bills for some property owners.
Big Tax Bills if You Leave
Even if you find a buyer after all of these taxes and have anything left to move with, NY has become brutal in auditing the tax returns of existing residences. They have been hitting the average relocator with an extra income tax bill of over $100,000. Though this still may be the best move, because it doesn’t look like our property tax bills are going down anytime soon. Not unless we appeal them.